Saturday, July 12, 2008
Philippines: Workers of the World

Philippines: Workers for the WorldBy George Wehrfritz and Marites VitugNewsweek International

Oct. 4 issue - Galicano Solares lives beneath a highway overpass in a dank Manila slum. His on-again, off-again construction job pays $4 a day, considerably more than he earned in the gold mines of Bicol before he moved to the city in the late 1980s. Yet he can't afford to educate his three children-now under the care of relatives in the countryside-let alone build the middle-class future of their dreams. But the 37-year-old with a stubbly chin and sweat stains on his T shirt has one advantage over others in the squatter settlement: his wife is a domestic helper in Saudi Arabia. "If there's an emergency, we call her," he says, "like when one of our children had a fever recently and we needed money for medicine."

That story of economic struggle, multiplied thousands of times over, is the story of the Philippines. Despite the wave of industrial development that has swept much of East Asia in recent decades, the country of 80 million remains extremely poor, mismanaged and still predominantly agrarian. But the Philippines does play a visible role in the global economy, thanks largely to a single export commodity-its people. According to the government, 1 million Filipinos will go abroad as contract workers this year, the biggest exodus ever. "The Philippines has already surpassed Mexico as the largest source of migrant labor in the world," says Manolo I. Abella, a migration specialist at the International Labour Office in Geneva. In all, about 8 million Filipinos-an astounding one tenth of the country's citizens-currently work overseas to support families back home. They remit more than $7 billion annually, according to the government, but that's only official transfers. A recent Asian Development Bank report put the real figure in the $14 billion to $21 billion range-a sum that dwarfs both foreign direct investment and aid flowing into the country, and amounts to 32 percent of GNP.

In the past, the Philippines was shamed by its inability to create enough good jobs to keep its people at home. But hard economic reality-a 14 percent unemployment rate and one of the highest poverty indexes in the world (nearly half the population subsists on less than $2 a day)-has shifted the sentiment. Today, in a move that countries like Indonesia and Bangladesh are likely to emulate, the government takes the position that, like it or not, the overseas workers constitute the nation's biggest comparative advantage in an increasingly borderless world. And so Manila makes it easy for its citizens to emigrate, and works hard, through its embassies, to see that their rights as foreign workers are protected. When extremists took a Filipino truck-driver hostage in Iraq recently, for example, Manila agreed to withdraw its contingent of soldiers there to win his release.

Unlike much of East Asia, where plummeting fertility rates are the norm, the Philippines could see its population balloon to 130 million by 2050. Experts say the country would explode if the flow of migrants were halted. "I've always viewed [overseas employment] as a safety valve," Labor and Employment Secretary Patricia A. Sto. Tomas told NEWSWEEK. "If you prevent them from going to Hong Kong or Saudi Arabia, you might have a revolution on your hands." That risk, combined with official helplessness to fix the local economy, has forced Manila to reconsider migration in a fundamental way. Its new-and more controversial-position: "Our traits as a people lend ourselves well to being part of the [global] service industry," says Tomas. "Perhaps that is what globalization means to us."

Labor migration is as old as the nation-state. Millions of Irish fled a devastating potato famine between 1846 and 1848, Chinese fanned out across Southeast Asia for similar reasons in the 19th century and India suffered a postcolonial brain drain that has only recently begun to reverse itself. Yet both the volume of today's labor outflow from the Philippines, and the extent to which Manila facilitates it, are unique. In a system that has evolved since strongman Ferdinand Marcos dispatched crews to work Saudi Arabian oilfields in the 1970s, the government licenses workers heading overseas, collects fees for each departure, regulates a mushrooming labor-brokerage industry and tasks its diplomats to protect a burgeoning expatriate work force based on 56 bilateral treaties with host nations around the world.

Unlike Mexico, where the vast majority of departing migrants head for a single country (the United States) illegally, Filipinos find themselves welcomed around the world as contract employees, both semiskilled and professional. They're laying pipelines in Siberia, mining diamonds in Angola and sailing ships in all the world's oceans. They clean thousands of homes a day from Hong Kong to Dubai to London; Bahrain's prime minister employs some 50 Filipinos in his own household, and is said to have developed such a fondness for the woman who manages them all that he sends her home to the Philippines on vacation each year accompanied by a bodyguard.

But some experts worry that the trend will, in the long run, hurt the Philippines more than help. While labor migration does serve as an economic stopgap, it's not a good development model. That's especially true when a country starts losing its best and its brightest workers. Although the stereotypical Filipino migrant is a nanny in Hong Kong, the largest group of new recruits falls under the category "professional and technical worker," which includes engineers, pilots, physicians and nurses. In 2002 they accounted for 35 percent of all departures-and many social workers fear their flight will bring down the country's medical system, erode its technology base and, in the end, ruin any chance the Philippines has of becoming a modern, industrialized country. "One of the defining characteristics of the Philippine middle class," says a senior Western economist in Manila, "is that they all want to get out."

The reason is simple: low pay. Lilian Bayot, a 29-year-old nurse with the Red Cross in Manila, earns $3,000 a year, which she says is "not enough to support my family." So she is now awaiting a visa to work in the United States. She plans to settle in Florida, where she's got a pending job offer that will pay her $40,000 a year. And she'll become eligible for a green card within months. According to a global salary study done in 2002, the average Filipino nurse earned just $139 a month at home compared with $650 in Singapore, $982 in Saudi Arabia and $1,666 in the United Kingdom. Nurses now leave the Philippines at three times the rate at which they matriculate and enter the work force.

Top college grads face the same salary problem. Last March a 28-year-old medical-school graduate named Elmer Reyes Jacinto stirred a national outcry when he topped the annual medical board exams (besting 947 other successful test takers) only to announce his intention to move to New York to become a nurse. He has since changed his mind-opting instead for a nursing job in Florida. "It's hypocritical when I say it's not economic," says Jacinto. "But it's more than that. I see a brighter future for myself there than here." Dr. Jaime Galvez Tan, vice chancellor for research at the University of the Philippines in Manila, sees that as a troubling portent. "Sadly, this is no longer brain drain, but more appropriately, brain hemorrhage," he says. "Very soon the Philippines will be bled dry."

Labor migration also has a social cost. Experts say that overseas employment is exacerbating social problems in the Philippines, including juvenile delinquency and marital breakups. According to one study, a typical domestic worker in Saudi Arabia will remit the bulk of her $200 monthly salary to her husband, who uses the money to buy consumer products for the children and to support extended family members looking for handouts. The husband often can't or won't find work. Worse, says Florence May Cortina, who heads a help center for migrant workers in Quezon City near Metro Manila, the overseas worker is often shocked to learn "there is no savings" when she returns. Another study declares the kids of migrants "emotional orphans" more likely to commit crime, take drugs or have children out of wedlock.

A decade ago, when Fidel Ramos ran the Philippines and the country looked set to become Asia's newest manufacturing center, officials spoke optimistically of bringing overseas workers home. Their logic: professionals and semiskilled Filipinos with savings in their pockets could spur development by starting small companies. "We were riding a wave of growth," says Cielito Habito, Economic Planning secretary under Ramos. "There was a sense that they had something to come home to." But the 1997-98 Asian financial crisis sent the country into a prolonged tailspin, and it hasn't yet recovered. Habito views outmigration as a necessary evil, saying: "Some people have begun to argue that this is part of our natural role in the world. Frankly, I'm ambivalent about that."

Fernando Aldaba, an economist at Ateneo de Manila University, argues that the government is using remittance payments to mask its economic-policy failures. He asserts that to create new and better jobs, Manila must streamline the economy, attract foreign investment, encourage entrepreneurship and find ways to make household members more productive-none of which is happening with any great haste today. "People leave because of lack of opportunities," he concludes. "The government shouldn't be let off the hook."

Migration proponents insist the situation isn't quite so dire. Labor outflow, they argue, equips Filipinos with skills, know-how and capital. They eventually return home and carry the national economy forward-much like the expatriate Irish did in their homeland in the 1990s. Pessimists point to Lebanon, where remittances from overseas have propped up a dysfunctional state. As Filipinos add to their achievements overseas, it's only a matter of time before the government will face the same question once posed to Indian Prime Minister Indira Gandhi: How is it that Indians succeed everywhere but in their home country?

That's irrelevant to Galicano Solares. When his wife returns from her second two-year stint in Saudi Arabia next February, he hopes to be able to surprise her with news that he, too, will make such a journey. "I've already prepared my passport," he says. "I want to work as a ship's repairman in Jamaica." Then they will typify the new middle-class family: Mom in the Middle East, Dad in the Caribbean, three kids at home studying to become engineers and nurses so they, too, might someday venture abroad. That's better than living under a freeway, to be sure. But is it the best Manila can offer? For now, the answer is yes.